It's that time of year again. You've overindulged in Thanksgiving turkey, embarrassed yourself at the office party, spent four hours researching big-screen TVs and now you're ready to spend five minutes on your financial life. Step #1: Look at last year's to-do list. Step #2: Make excuses why none of it was addressed. Step #3: [...]
When Vanguard isn't promoting their interests by urging us to adopt the Vanguarding lifestyle (how long until they drop the terrible marketing campaign?) they're adopting the role of the parental figure - helping us temper our expectations about the direction of bond risks and returns. We're not trashing Vanguard. We love Vanguard. They have lots [...]
We humans are a curious bunch. Occasionally we say one thing but do another. Almost as often this gets us into trouble. We sing the economic blues yet restaurant parking lots are packed. We cry over crushing debts yet vote for spend-happy politicians. We claim to be long-term, risk averse investors yet we chase performance. [...]
Where are US retail investors putting their money? Here's a YTD summary of mutual fund inflows/outflows: Inflow/Outflow ($million) June 2010 YTD 2010 2009 Money Market (30,818) (487,494) (378,362) US Stock (7,518) (16,984) (25,748) International Stock (328) 19,620 25,532 Balanced (706) 7,385 (3,290) Muni Bonds 1,988 19,524 72,123 Taxable Bonds 17,618 119,584 284,465 Commodities 823 [...]
"...and the young they can lose hope ‘cause they can't see beyond today." I don't think Eddie Vedder was writing about investing but he might as well have been if judging by information we received about fund flows during a recent discussion with our friends at Dodge & Cox. Although investors poured $19.6 billion into [...]
Jerry Seinfeld once wondered aloud, "Who are these people who get on a plane without a book? I'll tell you who they are. These are the people who want to talk to you," he quipped. To paraphrase Ayn Rand the best way to knock over a house of cards is to follow a position through [...]
Behavioral finance - the study of how emotions impact investment decisions - has always been a favorite topic of ours. Longtime friends and clients know we love climbing onto our soapbox to rail against short-term, kneejerk, irrational and emotional decisions caused by an overwhelming desire to act for the sake of acting in a desperate [...]
Today the internet, newspapers and TV will be full of stories marking the one year anniversary of the US stock market (as measured by the S&P 500) reaching its low point. We'll hear that the index is 68% higher today than it was 12 months ago. Hooray for investors! - maybe. The pros/cons of market-timing [...]
Some interesting nuggets of info from the recently released "Wealth and Values" survey from PNC Wealth Management (a unit of The PNC Financial Services Group): wealthy Americans have become more concerned over the last two years that their children are becoming spoiled 35% believe their children are "too spoiled by money and have too many [...]
Holiday cheer? "Bah, humbug!" Here’s some coal for your stocking... In a paper entitled "The Age of Reason: Financial Decisions over the Life-Cycle with Implications for Regulation" authors Sumit Agarwal, John C. Driscoll, Xavier Gabaix, and David Laibson argue that when it comes to money our accumulated experience and wisdom are lost to our declining [...]